Udemy Reaps $65M To Grow Global Online Ed Smorgasbord

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Udemy, the San Francisco-based online education marketplace, said today it has raised $65 million to expand its international course offerings in subjects ranging from Web development to writing and other skills that can lead to higher earnings.

Udemy CEO Dennis Yang says the company will continue to build its global community of seven million students and 16,000 instructors, increasing the number of lessons taught in languages other than English and opening up to foreign payment methods.

“We want to truly localize the experience,” Yang says.

The $65 million Series D financing round was led by New York growth equity firm Stripes Group, joined by Norwest Venture Partners and Insight Venture Partners. Stripes Group has invested in other online marketplaces including Mountain View, CA-based Upwork (formerly Elance-oDesk), an online hiring hall where businesses can find skilled freelancers such as Web developers, graphic artists, and writers. Stripes Group founder and managing partner Ken Fox will be joining Udemy’s board. Udemy’s fundraising now totals $113 million.

Udemy offers a home base for instructors—from august university professors to skilled hobbyists—who want to create courses on their favorite topics. Career-related courses are among the most popular offerings, such as training in computer programming and office productivity software such as Microsoft Excel. (Pictured above is Utah-based Web development instructor Rick Walter.)

But in Udemy’s cafeteria-style learning environment, students can also focus on leisure pursuits such as Thai cooking and break dancing. Once they sign up, students can begin the course at any time and have perpetual access to it, Yang says.

On the company website, teachers can learn how to create the video lectures at the core of each course. The length of each course is up to the teacher—it can be as little as 30 minutes, as long as 40 hours, or longer. Prices also vary greatly, from free of charge to several hundred dollars. Udemy provides a payment mechanism to funnel fees from students to teachers.

Instructors retain all rights to the content, and keep the full fees if they promote their own courses. The Udemy site contains its own training materials on promoting classes through the teachers’ own social media contacts and by other means. Once an instructor brings a student under the Udemy tent, the company can recommend other courses that might appeal to these lifelong learners, Yang says.

“They’ll come back and learn from other instructors,” Yang says. When Udemy handles the promotional chores for an instructor, the company retains half the tuition.

Udemy competes with other consumer-focused online education hubs such as Lynda.com, which was acquired by professional network LinkedIn in April for $1.5 billion. Udemy is building a database of students and their interests from instructor contacts, by word of mouth, and other methods, while LinkedIn can draw on its knowledge of its members’ professional profiles to suggest Lynda.com courses that might be advantageous in their careers.

Udemy doesn’t disclose how much money it’s taking in, but reports that its revenues have grown 200 percent in the last 12 months. Yang says two-thirds of Udemy’s students are outside the United States, and nearly half of company revenue comes from them. However, 80 percent of Udemy’s classes are still taught in English—a situation Yang wants to change.

“We’re definitely trying to increase the number of non-English-speaking courses,” Yang says. Udemy has created versions of its website for speakers of German, Spanish, and Japanese. With its new funds, the company will increase its international outreach to Germany, Brazil, and Japan, and to English-speaking countries outside the United States, including the United Kingdom, Canada, Australia, and India. Yang says the new money will also fund expansion of Udemy’s services to businesses for corporate training.

Like many edtech companies, Udemy is tailoring its offerings for students who like to fit their lessons into small intervals during a busy day—while waiting for a commuter train, for example. More than 30 percent of Udemy students tap into their courses through mobile devices such as smartphones and tablet computers, the company says.

The ideal length of a video lecture, according to the advice Udemy gives instructors, is two to five minutes.

“We recommend small bite-sized chunks,” Yang says.

Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy